HARARE, Zimbabwe - Weary Zimbabweans are facing a new wave of price increases that will put many basic goods even further out of their reach: A loaf of bread now costs what 12 new cars did a decade ago.
Independent finance houses said in an assessment Tuesday that annual inflation rose this month to 1,063,572 percent, based on prices of a basket of basic foodstuffs. Economic analysts say that unless the rate of inflation is slowed, annual inflation is likely to reach about five million percent by October.
As stores opened for business yesterday, a small pack of locally produced coffee beans costs just short of one billion Zimbabwean dollars. A decade ago, that sum would have bought 60 new cars.
And more price rises were expected after the state Grain Marketing Board announced up to 25-fold increases in its prices to commercial millers for wheat and the corn-meal staple.
The economy was on shop clerk Jessica Rukuni's mind as she left a swimming pool in downtown Harare's central park with three disappointed children. She found the new admission price of 100 million Zimbabwe dollars - 30 U.S. cents - out of reach.
"It's far too much for most people who don't get U.S. dollars," she said.
Her income is the equivalent of about one U.S. dollar a day, and her family has one basic meal daily.
The collapsing economy was a major concern of voters who dealt longtime President Robert Mugabe a defeat in March 29 elections. His challenger, Morgan Tsvangirai, topped the poll but did not win the simple majority needed to avert a runoff. The two are to face each other in a second round June 27.
Mugabe planned to officially launch his runoff campaign with a rally Sunday at his party's headquarters in Harare, the state-run Herald newspaper reported yesterday.
The opposition's campaigning has been hampered by violence for which it blames Mugabe's government and party. The opposition alleges that Tsvangirai is the target of a government assassination plot, and he has been out of Zimbabwe since shortly after the March 29 voting.
Tsvangirai plans to return to Zimbabwe to campaign for the runoff once security measures are in place, his aides have said.
Mugabe said yesterday that the opposition was fanning violence. Independent observers have said that although the opposition has committed some retaliatory attacks, the vast majority of attacks have been by Mugabe supporters.
Mugabe accuses the United States, the European Union, and especially former colonial ruler Britain of using their economic influence to back his opponents and bring about his ouster. He has severed ties with the World Bank, International Monetary Fund, and other financial organizations.
The economic decline has been attributed to the collapse of the agriculture sector after the often-violent seizures of farmland from whites. Mugabe said that the seizures, begun in 2002, were to benefit poor blacks, but many of the farms went to his loyalists.
"The crunch is going to come when local money is eroded to the point it is no longer acceptable" in commercial activities or as earnings, especially by Mugabe's loyalists, independent Harare economist John Robertson said.